Independent Banker - December 2021 - 35

Next: The case against the CFPB's Section 1071 proposal 
changes to the agency's CRA
enforcement. The OCC issued an
announcement in July 2021 to
rescind the rule and committed
to work with the Federal Reserve
Board and the FDIC on joint
CRA rulemaking.
Small business loan reporting
Section 1071 of the Dodd-Frank
Act amends the Equal Credit
Opportunity Act (ECOA) to require
reporting of specific categories
of business loans. In September
2021, the Consumer Financial
Protection Bureau (CFPB) issued
a notice of proposed rulemaking
to facilitate the small business
loan requirements. Under the rule,
institutions would be required to
collect and report data on certain
business credit applications in
three categories:
 Data that financial institutions
would generate or provide
 Data provided by the applicant
or that a financial institution
could determine by reviewing
information provided by the
applicant or a third party
 Data that addresses the
demographics of the
applicant's principal owners or
ownership status.
" Under Section 1071, the CFPB
was only required to collect 12 data
" As a national bank, we were focused on
the October implementation date for the
CRA changes. That changed, of course,
when the OCC pumped the brakes. "
-JAMIE SANTISTEVAN, NATIVE AMERICAN BANK
points from covered institutions, "
says Michael Emancipator, ICBA's
vice president and regulatory
counsel, " However, it nearly doubled
that number to 21 data points.
If finalized as is, the effect could
[transform] small business lending
and serve to make it homogenized,
which is contrary to what community
banks offer. "
ICBA has pursued efforts to
exempt as many community banks
as possible, and Emancipator
encourages community banks to seek
ways to influence revision of the rule
(go to the next page for more from
Empancipator on Section 1071).
A 'pause in regulatory changes'
Despite the lack of changes,
community bankers were engaged in
robust efforts to oversee regulatory
QUICK STAT
21
The number of data points the CFPB
would require covered institutions
to report under the agency's
Section 1071 proposal
and risk management.
" We welcomed the pause in
regulatory changes. As a national
bank, we were focused on the October
implementation date for the CRA
changes. That changed, of course,
when the OCC pumped the brakes
and announced a commitment to
working with the FDIC and FRB
for joint revisions, " says Jamie
Santistevan, vice president of
compliance, Bank Secrecy Act (BSA),
anti-money laundering (AML)
and CRA and operations officer at
$180 million-asset Native American
Bank in Denver. During this pause,
Santistevan has witnessed more
incidents of attempted fraud.
" Hot buttons for us, like many
other financial institutions, are fraud
and cybersecurity. We saw an uptick
in pandemic-related schemes and
fraud on top of the ones already in the
mix before the pandemic, " he says.
" For technology-based solutions and
security protocols, we've taken on the
costs and employed great efforts to be
sure our data and customer security is
where it needs to be. "
Tim Grooms, chief risk officer at
$800 million-asset First State Bank
in Winchester, Ohio, says he's noticed
a similar increase but the bank is
focusing on cybersecurity.
" We also saw an uptick in fraud,
especially in connection with
the early paper checks issued for
stimulus payments. Some customers
also received calls saying that
stimulus payments were being held
and attempting to scam them for
additional information, " Grooms
says. " We've had a significant focus
on cybersecurity as a continuation
from 2020 to maximize measures
for our own activities and our
customers' accounts. " 
Mary Thorson-Wright is a writer in
Washington, D.C.
independentbanker.org Q 31
http://www.independentbanker.org
Independent Banker - December 2021

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